2015-08-02

Equivalence between ETS and a carbon tax

While the two do have significant differences, they also share some commonality, or equivalence. For example, the ETS implies a equivalent price or tax to the carbon tax when the target of emissions is set as the exactly same that a carbon tax would achieve. Of course, there are other conditions that would need to meet. For example, the ETS must be a national and include all emissions sources where the carbon tax would apply to and the ETS market needs to be efficient and there is only one national price.

While the Abbott politics has hit hard on carbon taxes imposed by ALP government, there is no point to deny the equivalence of an well functioned ETS and a carbon tax.

To do it is just too cowardly in the wake of the very effective attack on the ALP government's carbon tax. Those who attempt to battle the Abbott anti carbon tax mantra should do better than that.